TASMANIAN motorists will benefit from cheaper petrol prices once more real-time bowser pricing information and mobile apps become available, says Australians Competition and Consumer Commission chairman Rod Sims.
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The ACCC last week released its in-depth investigation into prices paid at Northern bowsers which it launched last year.
It found motorists paid 12 cents more per litre compared to motorists in Brisbane, Melbourne, Sydney, Perth and Adelaide between 2012 and 2016 and could pay up to 4 cents per litre less if there was more competition in the retail market.
The report noted that while higher transport and operating costs covered about 60 per cent price difference, Launceston retailers had on average higher profit margins over the past decade.
In comparing Launceston to Adelaide over 2014-15, the ACCC found Launceston had a higher net retail margin of 4 cents per litre, higher retail operating costs of 4 cents a litre, and higher wholesale prices of 5 cents per litre.
Mr Sims said greater transparency of different petrol prices through distribution of real-time information through channels like mobile apps would lead to lower prices in lieu of discount vouchers.
“The growth of apps and real-time information will allow people to go where they want and will apply a bit of moral pressure on retailers,” he said.
“If petrol retailers and companies know that the public is watching, that will equalise a number of things.”
The ACCC launched action in the Federal Court against data collection company Informed Services to demand that private pricing information on 60 per cent of the nation’s petrol retailers be released publicly
The commission won the action and the information will be conveyed via a free mobile app with 15-minute pricing updates
Mr Sims said that discount deals, like the arrangement between the RACT and United Petroleum, had brought down the average petrol price over the first six months of the year and showed that people would travel for a cheaper bowser price.
The petrol company has 21 per cent market share in Launceston and Hobart with seven sites, just behind Caltex-branded independents with 25 per cent share.
“If you do discounts, you’re more likely to get business,” Mr Sims said.
“United have been a very good force for keeping prices down. It shows what can happen when you’ve got a bit of increased competition in there.”
A RETAILER’S PERSPECTIVE
Last week’s ACCC report noted that the average net profit for Launceston’s 33 retail sites was around $276,000 per site.
But it said the profits for the individual sites varied greatly with supermarket sites making the highest profits and smaller sites the least amount.
Former Burnie petrol retailer Alan Anderson said public perceptions that petrol retailers deliberately offered higher prices to expand their profit margins were false.
He said his operation, considered to be average-sized 10 years ago, traded 220,000 litres a month but only earned him a $28,000 after-tax annual profit.
“You need to make at least nine cents a litre to cover rent, insurance, advertising levies and wages,” Mr Anderson said.
He said prices were also high due to the high number of retailers in particular locations which meant retailers struggled to achieve profitable volumes.
Mr Anderson said aside from high volumes, the best chance at making profits was through on-sales from a large attached shop.
FORCE RETAILERS TO PROVIDE DATA BY LAW: RACT
THE RACT believes that companies should be legislatively compelled to provide data to petrol pricing information websites and mobile apps.
The ACCC report into Launceston’s petrol prices last week revealed that the city’s motorists had consistently paid on average more per litre of petrol than Hobart and Devonport motorists for the past eight financial years.
And the report showed Launceston had maintained the state’s highest prices among Hobart, Devonport, Burnie and Ulverstone since 2012-13.
The RACT’s Darren Moody said total transparency could only be driven by legislation.
“Given there is little the federal and state government can do to control pricing legislatively, providing as much information as possible to consumers to allow them to make an informed choice needs to be a priority,” he said.
“Both the ACCC and the state treasurer said you could get fuel pricing from apps and particularly made mention of the MotorMouth app or website.
“But if you actually went in and had a look, only 12 or the 39 Launceston sites are visible. No Shell, no United and none of the other independents.
“You also can’t get direct site pricing, only colours in five-cents-per-litre bands.”
The New South Wales Government recently passed petrol price transparent legislation and Mr Moody said what happens in the state with market dynamics and increased competition should be monitored.
“Should the data show it is having an effect on competition then a similar system should be implemented as soon as possible,” he said.
Treasurer Peter Gutwein last week said the ACCC report confirmed the need for more competition to drive down prices which was supported by the government.
